Discounts on Vendor Central: Types and Fees

Discounts in Amazon Vendor Central: How to Understand and Apply Them?

Discounts are an integral part of the sales strategy on Amazon Vendor Central. Properly setting them allows you to increase competitiveness, attract new customers, and improve sales results. However, discounts also come with additional fees that should be considered in profitability analysis.

This article presents the types of discounts available on Vendor Central and the fees associated with them.

Types of Discounts in Amazon Vendor Central

1. Promotional Discounts (percent off)

   They allow you to set a percentage discount on selected products, e.g., 20%.

   Used in campaigns promoting larger purchases, e.g., "20% off all products in this category."

   You can set them at any time of the year, adjusting for seasonality or sales goals.

2. Vouchers

   Discount coupons assigned to specific products.

   They can offer a percentage discount (e.g., 15%) or a fixed amount (e.g., $10).

   Displayed on product pages, increasing their visibility and encouraging customers to make purchases.

3. B2B Discounts

   Targeted at businesses, such as wholesalers or stores.

   Discounts are available for registered business customers in Amazon Business.

   They can include different levels of discounts depending on the quantity ordered.

4. Amazon Events

   Special discounts offered during events such as Black Friday, Prime Day, or seasonal sales.

   They require prior arrangements and negotiations with Amazon, often through the Vendor Manager.

   If a discount is rejected in the panel, it is worth contacting support or the Account Manager.

Each type of discount offers the opportunity to tailor the offer to the target group and current sales goals.

Fees Associated with Discounts
Using discounts in Vendor Central comes with additional costs that should be considered when calculating profitability:

• Handling fees – costs of managing discounts by Amazon.

• Promotion costs – e.g., for participation in events such as Prime Day.

• Reduced margin – discounts lower the profit on unit sales, so their impact on the overall business needs to be analyzed.

How to Calculate Profitability?

• Analyze what additional costs each type of discount generates.

• Factor in the expected increase in sales resulting from the promotion.

• Set potential profits against losses resulting from reduced prices.

Example: Promotional Discounts in Practice
Imagine that you offer a 20% discount on a popular product during Black Friday. Here’s what you need to consider:

1. Discount costs: if the product costs $100, the discount is $20 on each unit.

2. Amazon fees: add handling fees and promotion costs.

3. Increased sales: if sales increase by 50%, check if it compensates for the lower margin.

Summary: Is it Worth Using Discounts?
Discounts in Amazon Vendor Central are an effective promotional tool, but they require proper planning.

Key Principles:

• Match the type of discount to the campaign goal and target audience.

• Account for all costs to ensure profitability.

• Regularly monitor results and make adjustments to maximize profits.

Well-planned discounts not only increase sales but also build positive customer experiences and enhance the competitiveness of your offer.